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Tuesday, May 3, 2011

Day 204 - 5 Money Tips From My Nephew

May 3, 2011

Day 204 - 5 Money Tips From My Nephew

"If you spend too much money, you're stupid!"

~ Maverick

This past weekend I drove up to "Awesometown" to visit my sister, brother-in-law and my eleven (and a half!) year old nephew, Maverick. As always, I was well taken care of and made to feel right at home. My sister and brother-in-law (who are both 16 years older than me) were one of the earliest positive influences I had growing up when it came to money. I distinctly remember being in complete awe when they talked about paying off their student loans early - at the time getting rid of debt was a completely new concept to me. When I was in college, they opened up their home to me for the summer which allowed me to work a lot and save a bunch of money to help get me through the next year. They also gave me a very generous amount of money in order to get me through my semester abroad in Prague my junior year - something I have never forgotten and expect to pay forward to my nephew when the time is right. My sister mentioned to me this weekend how lucky they are, but I know without a doubt that most of the luck she talks about was really created by them. Pretty much nothing was just handed to them - yet they made an amazing life for themselves despite some bumps in the road. Sometimes perseverance + hard work = luck.

So Sunday night after Maverick pointed out to his Aunt Sarah that she looked like she had a blonde mustache, we decided to sit down and have a serious conversation about money. Not surprisingly, he is wise beyond his eleven and a half years when it comes to handling money. His parents have taught him - and me - very well. Check out Maverick's five tips on being responsible with your money. I know many adults who probably couldn't provide as valuable advice as Maverick.

1. Don't spend money like a crazy person. Straight to the point - that's Maverick. He is very knowledgeable about money saving techniques like turning off the lights and TV when you leave the room, and not using too much printer paper and ink on stuff you really don't need to print.

2. Don't go on too many vacation. Again, there is not much explaining to do here. Maverick understands that going on really big vacations costs a lot of money. He suggests taking smaller vacations closer to home. Many people put their entire vacation on a credit card - not really the way to find that relaxed feeling while you are sitting on the beach sipping a $15 mai tai, is it? Why not take a page out of Maverick's book? Annual passes to a nearby theme park give the entire family something to do most weekends. Maverick is content to spend most of his weekends at Six Flags. And by the way, Maverick can tell you absolutely everything (not joking) about any significant roller coaster in the US - G-force, inversions, height, speed, you name it. I dare you to stump him.

3. Get a car that gets high mileage per gallon. This advice is almost a no-brainer for this California kid. With gas prices over $4 bucks a gallon, Maverick knows that when Mom drives him around Awesometown it's costing a pretty penny. Take a look at all those hybrids available or at least opt for the more fuel efficient car rather than the gas guzzler. Your wallet will thank you.

4. Don't spend your money unless you really want something. This is one of my favorite tips from Maverick. His perfect example - sometimes he really wants a candy bar but he knows that in order to save up for an X-Box Kinect he can't be spending his money on little "wants" all the time. So he has enough willpower to tell himself that he doesn't need to buy the candy bar - eventually he will get some candy and most likely won't have to pay for it (e.g. Halloween, Easter, parents, friends, etc). Adults - are you listening? Key word: willpower. Go find some!

5. Don't fall for advertisements. Maverick has been studying the concept of propaganda in school and completely gets it. That ad on the Six Flags map that reminds you how thirsty you are with a well placed Vitamin Water next to it? You guessed it. And sorry to say those beautiful ladies will most likely not be showing up at your front door once you buy that brand new car or use that Axe body spray. Even subtler - beware of price anchoring. Ever seen the "sale" labels at the grocery store that show both the original and sale price? It's not a deal unless you know the original price - but is the original price on the label the original price you paid a month ago? How about the restaurant that has two sizes available for a dish? The more expensive and larger version is the anchor that leads you to believe the smaller, cheaper dish is a better deal. In all likelihood, the restaurant is making more money off of the less expensive dish and expects you to purchase it.

Thanks to my nephew for tearing himself away from the Nintendo DSi (and my alleged mustache) and offering his advice about money. The apple doesn't fall far from the tree.

What lessons have you taught your kids, nieces or nephews about money? Or vice versa, what have they taught you? Leave me some comments!